[Federal Register Volume 88, Number 239 (Thursday, December 14, 2023)]
[Notices]
[Pages 86628-86631]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-27474]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Pobeda Airlines, 108811, Russian Federation, Moscow, p. 
Moskovskiy, Kievskoe shosse 22nd km, 4/1. Moscow, Russia; Order 
Renewing Temporary Denial of Export Privileges

    Pursuant to Section 766.24 of the Export Administration 
Regulations, 15 CFR parts 730-774 (``EAR'' or ``the Regulations''),\1\ 
I hereby grant the request of the Office of Export Enforcement 
(``OEE'') to renew the temporary denial order (``TDO'') issued in this 
matter on June 15, 2023. I find that renewal of this order is necessary 
in the public interest to prevent an imminent violation of the 
Regulations and that renewal for an extended period is appropriate 
because Pobeda Airlines (``Pobeda'') has engaged in a pattern of 
repeated, ongoing and/or continuous apparent violations of the EAR.
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    \1\ On August 13, 2018, the President signed into law the John 
S. McCain National Defense Authorization Act for Fiscal Year 2019, 
which includes the Export Control Reform Act of 2018, 50 U.S.C. 
4801-4852 (``ECRA''). While Section 1766 of ECRA repeals the 
provisions of the Export Administration Act, 50 U.S.C. App. 2401 et 
seq. (``EAA''), (except for three sections which are inapplicable 
here), Section 1768 of ECRA provides, in pertinent part, that all 
orders, rules, regulations, and other forms of administrative action 
that were made or issued under the EAA, including as continued in 
effect pursuant to the International Emergency Economic Powers Act, 
50 U.S.C. 1701 et seq. (``IEEPA''), and were in effect as of ECRA's 
date of enactment (August 13, 2018), shall continue in effect 
according to their terms until modified, superseded, set aside, or 
revoked through action undertaken pursuant to the authority provided 
under ECRA. Moreover, Section 1761(a)(5) of ECRA authorizes the 
issuance of temporary denial orders. 50 U.S.C. 4820(a)(5).
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I. Procedural History

    On June 24, 2022, I signed an order denying Pobeda's export 
privileges for a

[[Page 86629]]

period of 180 days on the ground that issuance of the order was 
necessary in the public interest to prevent an imminent violation of 
the Regulations. The order was issued ex parte pursuant to Section 
766.24(a) of the Regulations and was effective upon issuance.\2\ The 
TDO was subsequently renewed on December 20, 2022 \3\ and again on June 
15, 2023,\4\ in accordance with Section 766.24(d) of the 
Regulations.\5\
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    \2\ The TDO was published in the Federal Register on June 29, 
2022 (87 FR 38707).
    \3\ The December 20, 2022, renewal order was published in the 
Federal Register on December 23, 2022 (87 FR 78925).
    \4\ The June 15, 2023, renewal order was published in the 
Federal Register on June 21, 2023 (88 FR 40200).
    \5\ At the time of the renewal, Section 766.24(d) provided that 
BIS may seek renewal of a temporary denial order for additional 180-
day renewal periods, if it believes that renewal is necessary in the 
public interest to prevent an imminent violation.
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    On November 21, 2023, BIS, through OEE, submitted a written request 
for a third renewal of the TDO. The written request was made more than 
20 days before the TDO's scheduled expiration and, given the temporary 
suspension of international mail service to Russia, OEE has attempted 
to serve a copy of the renewal request on Pobeda in accordance with 
Sections 766.5 and 766.24(d) of the Regulations. No opposition to the 
renewal of the TDO has been received.

II. Renewal of the TDO

A. Legal Standard

    Pursuant to Section 766.24, BIS may issue an order temporarily 
denying a respondent's export privileges upon a showing that the order 
is necessary in the public interest to prevent an ``imminent 
violation'' of the Regulations, or any order, license or authorization 
issued thereunder. 15 CFR 766.24(b)(1) and 766.24(d). ``A violation may 
be `imminent' either in time or degree of likelihood.'' 15 CFR 
766.24(b)(3). BIS may show ``either that a violation is about to occur, 
or that the general circumstances of the matter under investigation or 
case under criminal or administrative charges demonstrate a likelihood 
of future violations.'' Id. As to the likelihood of future violations, 
BIS may show that the violation under investigation or charge ``is 
significant, deliberate, covert and/or likely to occur again, rather 
than technical or negligent[.]'' Id. A ``lack of information 
establishing the precise time a violation may occur does not preclude a 
finding that a violation is imminent, so long as there is sufficient 
reason to believe the likelihood of a violation.'' Id.
    If BIS believes that renewal of a denial order is necessary in the 
public interest to prevent an imminent violation, it may file a written 
request for renewal, with any modifications if appropriate. 15 CFR 
766.24(d)(1). The written request, which must be filed no later than 20 
days prior to the TDO's expiration, should set forth the basis for 
BIS's belief that renewal is necessary, including any additional or 
changed circumstances. Id. ``In cases demonstrating a pattern of 
repeated, ongoing and/or continuous apparent violations, BIS may 
request the renewal of a temporary denial order for an additional 
period not exceeding one year.'' \6\ Id.
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    \6\ 88 FR 59791 (Aug. 30, 2023).
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B. The TDO and BIS's Request for Renewal

    The U.S. Commerce Department, through BIS, responded to the Russian 
Federation's (``Russia's'') further invasion of Ukraine by implementing 
a sweeping series of stringent export controls that severely restrict 
Russia's access to technologies and other items that it needs to 
sustain its aggressive military capabilities. These controls primarily 
target Russia's defense, aerospace, and maritime sectors and are 
intended to cut off Russia's access to vital technological inputs, 
atrophy key sectors of its industrial base, and undercut Russia's 
strategic ambitions to exert influence on the world stage. Effective 
February 24, 2022, BIS imposed expansive controls on aviation-related 
(e.g., Commerce Control List Categories 7 and 9) items to Russia, 
including a license requirement for the export, reexport or transfer 
(in-country) to Russia of any aircraft or aircraft parts specified in 
Export Control Classification Number (``ECCN'') 9A991 (Section 
746.8(a)(1) of the EAR).\7\ BIS will review any export or reexport 
license applications for such items under a policy of denial. See 
Section 746.8(b). Effective March 2, 2022, BIS excluded any aircraft 
registered in, owned, or controlled by, or under charter or lease by 
Russia or a national of Russia from being eligible for license 
exception Aircraft, Vessels, and Spacecraft (``AVS'') (Section 740.15 
of the EAR).\8\ Accordingly, any U.S.-origin aircraft or foreign 
aircraft that includes more than 25% controlled U.S.-origin content, 
and that is registered in, owned, or controlled by, or under charter or 
lease by Russia or a national of Russia, is subject to a license 
requirement before it can travel to Russia.
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    \7\ 87 FR 12226 (Mar. 3, 2022). Additionally, BIS published a 
final rule effective April 8, 2022, which imposed licensing 
requirements on items controlled on the Commerce Control List 
(``CCL'') under Categories 0-2 that are destined for Russia or 
Belarus. Accordingly, now all CCL items require export, reexport, 
and transfer (in-country) licenses if destined for or within Russia 
or Belarus. 87 FR 22130 (Apr. 14, 2022).
    \8\ 87 FR 13048 (Mar. 8, 2022).
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    OEE's request for renewal for a period of one year is based upon 
the facts underlying the issuance of the initial TDO, the renewal 
orders subsequently issued in this matter, and evidence that continues 
to develop during this investigation. These facts and evidence 
demonstrate that Pobeda has continued, and continues, to act in blatant 
disregard for U.S. export controls and the terms of previously issued 
TDOs. Specifically, the initial TDO, issued on June 24, 2022, was based 
on evidence that Pobeda engaged in conduct prohibited by the 
Regulations by operating multiple aircraft subject to the EAR and 
classified under ECCN 9A991.b on flights into Russia after March 2, 
2022, from destinations including, but not limited to, Antalya, Turkey, 
Gazipasa, Turkey, and Istanbul, Turkey, without the required BIS 
authorization.\9\ Further evidence submitted by BIS indicated that 
Pobeda also continued to operate aircraft subject to the EAR 
domestically on flights within Russia, potentially in violation of 
Section 736.2(b)(10) of the Regulations.
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    \9\ Publicly available flight tracking information shows, for 
example, that on March 6, 2022, serial number (``SN'') 64862 flew 
from Antalya, Turkey to Moscow, Russia. On March 7, 2022, SN 64863 
flew from Gazipasa, Turkey to Moscow, Russia, and, on March 6, 2022, 
SN 64864 flew from Istanbul, Turkey to Mineralnye Vody, Russia.
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    As discussed in the prior renewal orders, BIS presented evidence 
indicating that, after the initial June 24, 2022 TDO issued, Pobeda 
continued to operate aircraft subject to the EAR and classified under 
ECCN 9A991.b on flights both into and within Russia, in violation of 
the Regulations and the TDO itself.\10\ The December 20, 2022 order 
detailed flights into and out of Russia from/to Minsk, Belarus.\11\ The 
June 15, 2023 renewal order documented a similar pattern of prohibited 
conduct.\12\
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    \10\ Engaging in conduct prohibited by a denial order violates 
the Regulations. 15 CFR 764.2(a) and (k).
    \11\ Publicly available flight tracking information shows, for 
example, the following flights: (1) on November 26, 2022, SN 61793 
flew from Minsk, Belarus to Moscow, Russia; (2) on December 3, 2023, 
SN 41238 flew from Minsk, Belarus to Moscow, Russia; and (3) on 
November 24, 2022, SN 64866 flew from Minsk, Belarus to Moscow, 
Russia.
    \12\ Publicly available flight tracking information shows that 
SN 41227 flew from Istanbul, Turkey to Moscow, Russia on May 24, 
2023. Additionally, SN 41238 flew from Dubai, United Arab Emirates 
to Moscow, Russia on May 31, 2023. Further, SN 41242 flew from 
Antalya, Turkey to Perm, Russia on June 10, 2023.

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[[Page 86630]]

    Since that time, Pobeda continued to engage in conduct prohibited 
by the TDO and Regulations. In its November 21, 2023, request for 
renewal of the TDO, BIS submitted evidence that Pobeda continues to 
operate aircraft subject to the EAR and classified under ECCN 9A991.b, 
both on flights into and within Russia, in violation of the June 15, 
2023, renewal order and/or the Regulations. Specifically, BIS's 
evidence and related investigation demonstrates that Pobeda continued 
to operate aircraft subject to the EAR, including, but not limited to, 
on flights into and out of Russia, including from/to Dubai, United Arab 
Emirates, and Gazipasa and Istanbul, Turkey, Gyumri, Armenia, and 
Minsk, Belarus, as well as domestically within Russia. Information 
about those flights includes, but is not limited to, the following:

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                                                                            Departure/arrival
           Tail No.             Serial No.          Aircraft type                cities              Dates
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RA-73242.....................        41227  737-8LJ......................  Moscow, RU/Minsk,   November 29,
                                                                            BY.                 2023.
RA-73242.....................        41227  737-8LJ......................  Dubai, AE/Beslan,   November 28,
                                                                            RU.                 2023.
RA-73242.....................        41227  737-8LJ......................  Abu Dhabi, UAE/     November 26,
                                                                            Moscow, RU.         2023.
RA-73242.....................        41227  737-8LJ......................  Istanbul, TR/       November 15,
                                                                            Moscow, RU.         2023.
RA-73242.....................        41227  737-8LJ......................  Gyumri, AM/Moscow,  November 6, 2023.
                                                                            RU.
RA-73248.....................        41238  737-8LJ......................  Abu Dhabi, AE/      December 4, 2023.
                                                                            Moscow, RU.
RA-73248.....................        41238  737-8LJ......................  Yekaterinburg, RU/  December 4, 2023.
                                                                            Moscow, RU.
RA-73248.....................        41238  737-8LJ......................  Istanbul, TR/       November 27,
                                                                            Moscow, RU.         2023.
RA-73248.....................        41238  737-8LJ......................  Samarkand, UZ/      November 7, 2023.
                                                                            Moscow, RU.
RA-73248.....................        41238  737-8LJ......................  Dubai, AE/Moscow,   November 2, 2023.
                                                                            RU.
RA-73250.....................        41242  737-8LJ......................  Istanbul, TR/       December 4, 2023.
                                                                            Makhachkala, RU.
RA-73250.....................        41242  737-8LJ......................  Dubai, AE/          December 3, 2023.
                                                                            Makhachkala, RU.
RA-73250.....................        41242  737-8LJ......................  Chelyabinsk, RU/    December 2, 2023.
                                                                            Moscow, RU.
RA-73250.....................        41242  737-8LJ......................  Gazipasa, TR/       November 10,
                                                                            Moscow, RU.         2023.
RA-73250.....................        41242  737-8LJ......................  Samarkand, UZ/      November 8, 2023.
                                                                            Moscow, RU.
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III. Findings

    Under the applicable standard set forth in Section 766.24 of the 
Regulations and my review of the entire record, I find that the 
evidence presented by BIS demonstrates that Pobeda has acted in 
violation of the Regulations and the TDO; that such violations have 
been significant, deliberate and covert; and that given the foregoing 
and the nature of the matters under investigation, there is a 
likelihood of imminent violations. Moreover, I find that renewal for an 
extended period is appropriate because Pobeda has engaged in a pattern 
of repeated, ongoing and/or continuous apparent violations of the EAR. 
Therefore, renewal of the TDO for one year is necessary in the public 
interest to prevent imminent violation of the Regulations and to give 
notice to companies and individuals in the United States and abroad 
that they should avoid dealing with Pobeda, in connection with export 
and reexport transactions involving items subject to the Regulations 
and in connection with any other activity subject to the Regulations.

IV. Order

    It is therefore ordered:
    First, Pobeda Airlines, 108811, Russian Federation, Moscow, p. 
Moskovskiy, Kievskoe shosse, 22nd km, 4/1. Moscow, Russia, when acting 
for or on their behalf, any successors or assigns, agents, or employees 
may not, directly or indirectly, participate in any way in any 
transaction involving any commodity, software or technology 
(hereinafter collectively referred to as ``item'') exported or to be 
exported from the United States that is subject to the EAR, or in any 
other activity subject to the EAR including, but not limited to:
    A. Applying for, obtaining, or using any license (except directly 
related to safety of flight), license exception, or export control 
document;
    B. Carrying on negotiations concerning, or ordering, buying, 
receiving, using, selling, delivering, storing, disposing of, 
forwarding, transporting, financing, or otherwise servicing in any way, 
any transaction involving any item exported or to be exported from the 
United States that is subject to the EAR except directly related to 
safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) 
of the Regulations, or engaging in any other activity subject to the 
EAR except directly related to safety of flight and authorized by BIS 
pursuant to Section 764.3(a)(2) of the Regulations; or
    C. Benefitting in any way from any transaction involving any item 
exported or to be exported from the United States that is subject to 
the EAR, or from any other activity subject to the EAR except directly 
related to safety of flight and authorized by BIS pursuant to Section 
764.3(a)(2) of the Regulations.
    Second, that no person may, directly or indirectly, do any of the 
following:
    A. Export, reexport, or transfer (in-country) to or on behalf of 
Pobeda any item subject to the EAR except directly related to safety of 
flight and authorized by BIS pursuant to Section 764.3(a)(2) of the 
Regulations;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by Pobeda of the ownership, possession, or control of any 
item subject to the EAR that has been or will be exported from the 
United States, including financing or other support activities related 
to a transaction whereby Pobeda acquires or attempts to acquire such 
ownership, possession or control except directly related to safety of 
flight and authorized by BIS pursuant to Section 764.3(a)(2) of the 
Regulations;
    C. Take any action to acquire from or to facilitate the acquisition 
or attempted acquisition from Pobeda of any item subject to the EAR 
that has been exported from the United States except directly related 
to safety of flight and authorized by BIS pursuant to Section 
764.3(a)(2) of the Regulations;
    D. Obtain from Pobeda in the United States any item subject to the 
EAR with knowledge or reason to know that the item will be, or is 
intended to be, exported from the United States except directly related 
to safety of flight and authorized by BIS pursuant to Section 
764.3(a)(2) of the Regulations; or
    E. Engage in any transaction to service any item subject to the EAR 
that has been or will be exported from the United States and which is 
owned, possessed or controlled by Pobeda, or service any item, of 
whatever origin,

[[Page 86631]]

that is owned, possessed or controlled by Pobeda if such service 
involves the use of any item subject to the EAR that has been or will 
be exported from the United States except directly related to safety of 
flight and authorized by BIS pursuant to Section 764.3(a)(2) of the 
Regulations. For purposes of this paragraph, servicing means 
installation, maintenance, repair, modification, or testing.
    Third, that, after notice and opportunity for comment as provided 
in section 766.23 of the EAR, any other person, firm, corporation, or 
business organization related to Pobeda by ownership, control, position 
of responsibility, affiliation, or other connection in the conduct of 
trade or business may also be made subject to the provisions of this 
Order.
    In accordance with the provisions of Sections 766.24(e) of the EAR, 
Pobeda may, at any time, appeal this Order by filing a full written 
statement in support of the appeal with the Office of the 
Administrative Law Judge, U.S. Coast Guard ALJ Docketing Center, 40 
South Gay Street, Baltimore, Maryland 21202-4022.
    In accordance with the provisions of Section 766.24(d) of the EAR, 
BIS may seek renewal of this Order by filing a written request not 
later than 20 days before the expiration date. A renewal request may be 
opposed by Pobeda as provided in Section 766.24(d), by filing a written 
submission with the Assistant Secretary of Commerce for Export 
Enforcement, which must be received not later than seven days before 
the expiration date of the Order.
    A copy of this Order shall be provided to Pobeda and shall be 
published in the Federal Register.
    This Order is effective immediately and shall remain in effect for 
one year.

Matthew S. Axelrod,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2023-27474 Filed 12-13-23; 8:45 am]
BILLING CODE 3510-DT-P